Exam 15: Net Exports and International Finance

Suppose that a change in consumer preferences leads to a $50 billion decrease in net exports. JIf the value of the multiplier is 3, what is the size of the shift in the aggregate demand after Jthe multiplier process works through the economy?

The Bretton Woods system is an example of a fixed exchange rate system.

Managed floating is typically undertaken by a country to

A nation engages in a managed float exchange rate system to ensure that its currency will Jfluctuate freely with market forces.

When foreigners purchase U.S. assets, there is an inflow of funds from abroad and this is recorded as a

An increase in net exports due to a change in the exchange rate will shift aggregate demand

With the benefits of international trade, global production will be increased.

Given that countries A and B each specialize in the production of one good and voluntarily Jtrade it for the other country's good, then

If the U.S. exchange rate decreases relative to foreign currencies, then

If the price level in the United States decreases relative to prices in foreign countries, then

The U.S. and Canada are major trading partners. Suppose the Canadian dollar rises sharply in Jvalue against the U.S. dollar. At the same time, strong income growth in the U.S. increases the demand for Canadian exports. What happens to Canada's net exports as a result of these two Jevents?

What is a tariff?

When countries seek to maintain fixed exchange rates through intervention, their governments or central banks

Suppose a U.S. financial investor purchases bonds issued by the government of Peru. How Jwill this transaction be recorded in U.S. international transactions?

Figure 15-1 -Refer to Figure 15-1. An increase in purchases of U.S. goods and services by foreigners Jwould shift the

Under a gold standard exchange rate system, a country could not issue more money than it could back up with the gold it owned.

A system in which some governments or central banks seek to manipulate their exchange Jrates by buying or selling currency in the foreign exchange market is a

Which of the following affects the quantity of U.S. dollars demanded in the currency market?

A current account surplus exists when the balance on current account is positive.

Which of the following affects the quantity of U.S. dollars supplied in the currency market?